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    CHAPTER: 10 & 11: Pricing: Understanding and Capturing Customer Value and Strategies

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    afiq sergio
    The document discusses various pricing strategies that companies can use. It covers value-based pricing, where price is based on customer perceived value rather than costs, and cost-based pricing, where price covers costs plus profit. The document also discusses strategies for new product pricing like market skimming and penetration pricing. Finally, it outlines different price adjustment strategies companies can use like discounts, psychological pricing, and dynamic pricing.

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    CHAPTER: 10 & 11: Pricing: Understanding and Capturing Customer Value and Strategies

    Uploaded by

    afiq sergio
    26 views10 pages
    The document discusses various pricing strategies that companies can use. It covers value-based pricing, where price is based on customer perceived value rather than costs, and cost-based pricing, where price covers costs plus profit. The document also discusses strategies for new product pricing like market skimming and penetration pricing. Finally, it outlines different price adjustment strategies companies can use like discounts, psychological pricing, and dynamic pricing.

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    The document discusses various pricing strategies that companies can use. It covers value-based pricing, where price is based on customer perceived value rather than costs, and cost-based pricing, where price covers costs plus profit. The document also discusses strategies for new product pricing like market skimming and penetration pricing. Finally, it outlines different price adjustment strategies companies can use like discounts, psychological pricing, and dynamic pricing.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    26 views10 pages

    CHAPTER: 10 & 11: Pricing: Understanding and Capturing Customer Value and Strategies

    Uploaded by

    afiq sergio
    The document discusses various pricing strategies that companies can use. It covers value-based pricing, where price is based on customer perceived value rather than costs, and cost-based pricing, where price covers costs plus profit. The document also discusses strategies for new product pricing like market skimming and penetration pricing. Finally, it outlines different price adjustment strategies companies can use like discounts, psychological pricing, and dynamic pricing.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 10

    CHAPTER : 10 & 11

    Pricing: understanding and capturing customer


    value and strategies
    CHAPTER OUTLINE

    Price
    Value Based Pricing
    Cost Based Pricing
    Pricing Strategies
    WHAT IS PRICE?

    • The amount of money charged for a product


    or service or the sum of the values that
    customers exchange for the benefits of
    having or using the product or service.

    • What problems do companies face in setting


    price for products and services?
    VALUE BASED PRICING
    STRATEGIES

     Value based pricing: setting prices based on


    buyers’ perceptions of value rather than on the
    sellers’ cost.

     Good value pricing: offering just the right


    combinations of quality and good service at a fair
    price.

     Value added pricing: attaching value added


    features and services to differentiate a company's
    offers and charging higher prices.

     EDLP: Every Day Low Pricing


    COST BASED PRICING

     Cost based pricing: setting prices based on the cost


    for producing, distributing and selling the product plus
    a fair rate of return for effort and risk.

     Fixed costs: costs that do not vary with production or


    sales level.

     Variable costs: costs that vary directly with the level


    of production.

     Total costs: the sum of the fixed and variable costs


    for any given level of production.
    NEW PRODUCT PRICING
    STRATEGIES

    1. Market skimming pricing: setting a high price for


    new products to skim maximum revenues layer by
    layer from the segments willing to pay the high
    price, the company makes fewer but profitable sales.

    2. Market penetration pricing: setting a low price for a


    new product in order to attract a large number of
    buyers and a large market share.
    Product mix pricing strategies

    1. Product line pricing: setting the price steps


    between various products in a product line based on cost
    differences between the products, customer evaluation
    of different features and competitors' prices.

    2. Optional product pricing: the pricing of optional or


    accessory products along with a main product.
    P R O D U C T M I X P R I C I N G S T R AT E G I E S

    3. Captive product pricing: setting a price for


    products that must be used along with a main
    product.

    4. Product bundle pricing: combining several


    products and offering the bundle at a reduced price.

    5. By product pricing: setting a price for by


    products in order to make the main product’s price
    more competitive.
    PRICE ADJUSTMENT
    STRATEGIES

     Discount: a straight reduction in price on


    purchases during a stated period of time.

    1. Cash discount
    2. Quantity discount
    3. Functional discount
    4. Seasonal discount
    PRICE ADJUSTMENT
    STRATEGIES

     Psychological pricing: a pricing approach to make the product


    look less expensive to consumers than the reality, psychologically.

     Promotional pricing: temporarily pricing products below the list


    price, and sometimes even below cost to increase short run sales.

     Dynamic and internet pricing: adjusting prices continually to


    meet the characteristics and needs of individual customers and
    situations. This is especially prevalent online.

     International pricing: companies that market their products


    internationally must decide what prices to charge in different
    countries. It could be a uniform worldwide price or it could be
    country specific based on local market conditions and cost
    considerations.
     Geographical pricing: setting prices for customers
    located in different parts of the country or world.

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